TaxTMI 
TaxTMI 
2010 (9) TMI 848
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....; 2. Heard senior standing counsel appearing for the department and senior counsel Mr. V. Ramachandran appearing for the respondent-assessee. 3. The assessments in the case of Messrs. T.M.V. Shenoy pertains to the years 1996-97 to 2001-02 whereas assessments involved in the case of Messrs. K.H. Dhamdhere pertains to the assessment years 1997-98 to 2002-03. We have gone through the main orders produced in ITA Nos. 722/2009 and 1184/2009. Some of the assessments are income escaping assessments made based on material collected on survey conducted under section 133A of the Act and for later years assessments are regular assessments which are also based on the details collected during survey. The assessee is engaged in purchase, pro....
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....e purchase account of the assessee, the Assessing Officer found that the entire purchases are accounted as credit purchases though cash payments were made on the date of purchase itself as seen from the bought notes. Therefore, Assessing Officer treated the payments made under the bought notes as unexplained expenditure and brought the same to tax under Section 69C of the Income-tax Act. 4. The assessee filed appeals against the assessments challenging the additions made under section 69C of the Act. The first appellate authority partly allowed the appeal by deleting additions made as such but by sustaining addition of only peak of the purchases. The Tribunal on second appeal filed by the department as well as the assessee cancell....
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.... fact accounted the cash payments later. As already noticed by us, this is a case of assessee's purchasing raw materials with unaccounted cash and later accounting payments as and when cash balance is available in the books of account. However, what we find is that the Assessing Officer has not examined as to how the assessee generated the cash to account payments for the credit purchases accounted which were in fact purchases against cash payments. The assessee cannot run the business, whether in manufacturing or processing or even trading, without purchasing the goods and without paying for the same. This is a case where the genuineness of assessee's account itself has to be gone into because neither address of the supplier is there nor t....
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....in the computation of income. In other words the additions under Section 69C should not be disallowance of expenditure for the purchase of raw materials for processing or for trading if the purchases are genuine. We feel the Assessing Officer should consider the entire accounts pertaining to purchase of raw materials and all other transactions and additions should be made only to the extent of the unaccounted income if any generated by the assessee in the course of business. Assessee's contention accepted by the Tribunal is that assessee has been following the same system of accounting for the last several years. In our view this only indicates that assessee is generating and rolling black money and their accounts are unreliable. ....